AstraZeneca Outsources to China, Re-Tools U.K. Distribution

Following scads of other companies to China, AstraZeneca is outsourcing the manufacturing of a key ingredient in one of its best-selling drugs to contract factories in the P.R.C.

The company said last month that it plans to get out of manufacturing (never a particularly strong suit for the industry, the Health Blog noted at the time) over the next few years. Now AstraZeneca says it will start buying lactam, a key ingredient in its antipsychotic drug Seroquel, from contract factories in China, the Times of London reports.

AstraZeneca has opened a “sourcing center” near Shanghai, and has another in Bangalore, India, the article says. Those centers will help the company shift from producing its own active pharmaceutical ingredients (APIs) at factories in Europe to buying them from contract factories in China and India. The company’s in the process of cutting more than 7,000 jobs, about 11% of its work force.

AstraZeneca is also in the midst of re-tooling its distribution system on its home turf, the U.K., Dow Jones Newswires reports. Under the new system, the company will use two wholesalers, AAH and UniChem.

There’s been a lot of chatter about U.K. drug distribution ever since Pfizer said earlier this year that it would distribute only through a single wholesaler in the U.K. The company said the move would clamp down on counterfeits, but regulators have been making noises that the exclusive deal may be hurting competition. Sanofi-Aventis has also been reviewing its U.K. distribution system.